Moody's is reviewing the Aa1 bond fund rating of the iShares Global Inflation Linked Bond Fund, which is exposed to sovereign bonds issued by Japan, Italy and the US, each of which is on the ratings agency's watch list.
The iShares product is a passive exchange-traded fund (ETF) which aims to replicate the performance of the Barclays Capital World Government Inflation-Linked Bond Index. As such it has significant exposure to Japanese, Italian and US bonds.
Moody's warned last month that it may downgrade Italy's Aa2 credit rating amid fears that rises in interest rates will scupper the country's fragile recovery. A few weeks earlier, the agency said long-term fiscal concerns about Japan's economy meant it had put the country's Aa2 bond rating on review for a downgrade. Earlier this month, Moody's said it was reviewing the triple-A rating of the US because it believes the country's deficit-reduction measures will not be sufficient.
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